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Managers of the District of Columbia have agreed to phase out the district's non-exchange small-group health insurance market over two years, instead of shutting all of it down in 2014.

Members of the board of the District of Columbia Health Benefit Exchange Authority voted unanimously recently to adopt a "two -year transition to a health insurance market in which insurers will compete for business based on price, quality, and choice," exchange officials said.

The Patient Protection and Affordable Care Act of 2010 (PPACA) calls for the U.S. Department of Health and Human Services (HHS) to work with state agencies to set up exchanges, or Web-based health insurance supermarkets, for individuals and small businesses of all states and the District of Columbia by Oct. 1.

The District of Columbia has decided to run its own exchange, rather than letting HHS provide exchange services for its residents.

District officials have argued that the district is too small to have a successful exchange unless it gets all individual and small-group business into the exchange, and that the market is not especially competitive today.

"One insurer controls more than 75 percent of the market, benefits are uneven, and premiums often jump by 10 percent to 20 percent a year," officials said in the exchange decision announcement.
Opponents of PPACA are fighting to block implementation of the law, and D.C. employers and agents could continue to fight the D.C. exchange authority decision on the non-exchange market.

If the transition plan works as the authority expects:

- Small-group employers with health coverage could keep the non-exchange coverage until 206. Starting in 2015, the employers would have to renew the coverage through the D.C. exchange website.

- Starting in 2014, small-group employers that want to set up new health plans, rather than replacing existing plans, will have to buy the coverage through the exchange.

- Individual consumers will have to start buying both new and renewal coverage through the exchange starting in 2014.

- Any non-exchange plans sold between 2014 and 2016 will have to comply with all of the requirements that apply to the coverage sold through the exchange system.